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Tuesday, March 1

Mental health forum: Medicaid & State Hospital Usage

Patricia Reedy Chief of Social Services Division of Mental Health Illinois Department of Human Services

A major change occurred a few months ago (with very little fanfare) within the public mental health system. It should be of enormous benefit for individual consumers of our services. Consumers who have Medicaid will now be able to maintain their eligibility during hospitalization in an Illinois state psychiatric hospital.

 Here is the background: Hospitals or nursing homes in which at least 51% of the consumers are being treated for psychiatric illness are called Institutes for Mental Disease (IMDs). A federal policy called the “IMD exclusion” prohibits federal Medicaid dollars from being paid during the time in which a Medicaid- eligible person between the ages of 21 and 65 is in an IMD. States that bill the federal government for a consumer who is in an IMD can face serious adverse federal action. Because of this, many states, including Illinois, developed the practice of simply arranging to have consumers’ Medicaid discontinued during an IMD admission. This eliminated the possibility that the feds would be billed for services for a given consumer during an IMD stay. It also, however, resulted in persons being discharged without coverage for needed follow-up treatment, medication, or other medical treatment.

 Mental health advocates both within and without the public mental health system have been pushing to find ways around this federal “IMD Exclusion.” State officials in the Illinois Department of Public Aid and Illinois Department of Human Services have long been sympathetic to the issue.

 It wasn’t until recently, however, that a mechanism was identified and agreed upon to turn this complex public policy problem into a nonissue in our public mental health system. Information technology played a large role in the improvement. The solution was the result of cooperative planning between the Illinois Department of Public Aid and several divisions of the Illinois Department of Human Services, including Mental Health, Program Support, and Human Capital Development.

 When someone is admitted to a state-operated psychiatric hospital, staff in our Office of Clinical and Administrative Program Support (OCAPS) access a Medicaid database to identify whether s/he has an active Medicaid case. If the person does have Medicaid, the OCAPS staff member is able, with the click of a mouse, to put this person’s Medicaid in a state of suspension. When the person is discharged from the state hospital, a simple mouse-click removes the suspended status from the Medicaid case. “This clearly is a tremendous improvement,” stated Jim Hobbs, OCAPS Director. “The risk of inappropriately billing the federal government is still avoided,” said Hobbs. “But, more importantly, the Medicaid safety net can be back in place as soon as the person leaves the hospital.”

 Just as Illinois’ system was finishing the process, the federal government issued a communication encouraging states to find ways to avoid terminating Medicaid benefits in such situations. “It was certainly a positive experience to learn that we were ahead of the curve on this one,” said Hobbs.

 This is the first of several articles that will appear in the Networker written by members of the Mental Health Services Task Force.

Posted on 03/01/05 at 02:05 PM


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